It's Still a Global Economy...

As part two of my last post regarding the interconnectedness of today's economy (found here), two big side issues come to mind: outsourcing and off-shoring.  It's important to recognize that these are two different strategies, sometimes overlapping, but not necessarily (imagine a Venn Diagram...I do so like those).

Outsourcing has to do with when one company hires another firm to handle some, part, or all of one of it's production facets.  For instance, many colleges outsource food service and housekeeping, hiring an outside entity to handle those operations.  Another company may outsource logistics and transportation.  Or packaging.  Or marketing.  Anything not done in house is, effectively, outsourced.  Often it's just more cost-effective to hire someone else to worry about those things.

Off-shoring is when a company decides it's more cost-effective to produce their products in a different country.  T-shirts might be distributed by an American company, but it's much cheaper to pay workers in Honduras (where the shirt I'm wearing right now was produced even though it's by Fruit of the Loom, an American company).

So which are we more concerned about?  I've heard it here and there that we should move toward a "buy American" market.  That is, we should buy materials made here in the good ol' U.S. of A.  But what about materials made by American companies?  I mean, eventually, doesn't most of that money stay here in the States?  The company's books are U.S. based, so their revenue counts when the IRS comes a'knocking.  But, and ready for a wrench in the works?  What about foreign companies off-shoring to the U.S.?  U.S. workers, saving and spending in the U.S. Isn't that what we're looking for?  But the argument about where the revenue stream heads we just used regarding U.S. products not made in the U.S. is now used against us.  I came across this article in Bloomberg Businessweek which got me thinking about it.  Unbeknownst to me, Anheuser-Busch has been bought out by InBev, a Brazilian/European company.  Since their takeover, they've laid off a couple thousand U.S. workers as the company grows evermore profitable.  Even still, they've taken other brands they own (notably Beck's, as pointed out in the article) and moved production from Germany to the U.S.  That's good, right?

Even now, I still haven't wrapped my head around the global implications of AB InBev or the dozens of other companies that do the same thing...

So what does it mean to "buy American"?